Calls for $20K Bitcoin Grow as Price Hits Another Yearly High

It is very likely for Bitcoin to reclaim $20,000, a level it achieved during the height of a notorious “ICO boom.”

The benchmark cryptocurrency underwent a parabolic bull run in late 2017 as speculators used it as a gateway to enter the then-exploding blockchain startup sector. Hoards of new firms issued securities-like tokens to raise operational funds via bitcoin and ether.

That created an artificial demand, which sent both the cryptocurrencies “to the moon.”

But then, more than 90 percent of those startups either turn out to be failures or outright scams. The tokens they had issued to investors crashed to zero. Additionally, those malicious projects sold their Bitcoin and Ethereum holdings en masse, thereby starting one of the most prolonged bear cycles in the history of the cryptocurrency market.

The New Bitcoin Boom

But the ICO boom and bust is now in the rearview. Bitcoin has recovered vastly since it bottomed out in $3,000 in December 2018, a level it again threatened to retest during the March 2020 global market rout, led by the coronavirus pandemic and the economic mayhem it caused.

The cryptocurrency, as of October 27, 2020, was trading 250 percent higher from its year-to-date low of $3,858. Unlike a shady ICO-led pump, Bitcoin’s recent gains emerged from accommodative policies of the global central banks. They together injected multi-trillion dollars into the economy to make lending cheaper and support the government and corporate debts via unlimited bond-buying.

bitcoin, btcusd, cyptpcurrency, stimulus Bitcoin has only one historical resistance before it attempts to retest $20K. Source: TradingView.com

The collateral damage of those stimulus packages was a weaker US dollar and an unattractive long-term bond market. Investors, therefore, moved a considerable part of their capital into assets that provided better yields. Bitcoin, a scarce asset, served as an ideal destination.

Two weeks ago, multinational payments firm Square showed $50 million worth of Bitcoin in its balance sheets. Before them, a public-traded software company, MicroStrategy, replaced $425 million worth of its cash reserve with Bitcoin. Billionaire investor Paul Tudor Jones also took a similar call in June, noting that Bitcoin would offer him safety against a devaluating dollar.

The last seven days also saw major financial players entering the crypto space with new services. On Wednesday last week, PayPal announced that it is going to allow its users to buy, sell, store, and spend Bitcoin via its existing services. And on Tuesday this week, Singaporean banking giant DBS launched a new cryptocurrency exchange.

Bitcoin traders reacted to the sequence of good news by increasing their bids for the cryptocurrency. That pushed the price above crucial resistance levels, the latest being $13,498, Bitcoin’s highest level in 2020.

$20,000 Again?

And that served as the basis of yet another pump towards $20,000. A genuine adoption spree replaced the notorious ICO boom. Here are a few tweets by leading crypto analysts that predict a Bitcoin bull run ahead.

What do you think about Bitcoin’s ability to retest $20,000? Tell us on Twitter.

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